My wife entered US on H4 visa in Feb 2009. She has her I-94 (from H4 visa entry) which is valid till Feb 2012.

She got a job offer and her employer filed for H1B visa on Apr 1, 09. Her change of status (from H4 to H1B) has been approved last week and the new I-94 is attached with the approval letter and is valid from Oct 1, 09 to Sep 2012.

I am no longer maintaining my H1 status as I am working on EAD since Apr 15, 09. We have not filed I-485 for my wife. My question is:

1) Is she out of status at this time since she is not on H4 anymore as I am not maintaining H1?

2)Can she stay in the US legally and start working for her employer from Oct 1 since her change of status has been approved?

3) Or, does she need to go out of US asap and return with H1 stamp to be back in status?